Lenders, take note. June is National Homeownership Month, and if you’re still treating down payment assistance (DPA) like some fringe program, you’re about to get left behind. The housing market isn’t just shifting—it’s being dismantled and rebuilt in real time. Younger buyers are bypassing the legacy playbooks. They’re digitally native, financially savvy, and actively searching for alternatives to the tired “save for a decade to buy a home” model.

DPA is increasingly part of that new model, and digital platforms are accelerating its adoption. Since Zillow integrated DPA program information into nationwide listings in December 2021, millions of home shoppers have started exploring options. In its first year, more than 1 million unique users searched for DPA eligibility on Zillow, and 93% found at least one matching program. Fast forward to January 2025: over five million users have submitted DPA eligibility forms through the platform. The demand is real, and it’s growing fast.

DPA is the key to affordability, not a niche option

The traditional path to homeownership is now out of reach for many would-be buyers. Home prices have surged, wages have stagnated, and the gap between the two keeps growing. A 20% down payment? For many Millennials and Gen Z buyers, it’s the equivalent of a down payment on a private island — unrealistic, unattainable, and completely misaligned with their financial realities.

That’s where DPA programs come in. On average, they provide $18,000 in assistance and can reduce loan-to-value (LTV) by 6%, helping more applicants qualify. Many programs also cover closing costs, prepaid expenses, interest rate buydowns — even buyer’s agent commissions. Some offer full or partial forgiveness over time. Others are outright grants.

These aren’t fringe benefits. They’re powerful tools to unlock mortgage readiness, and lenders who ignore them may be turning away qualified borrowers.

What Canopy MLS can teach the industry about DPA integration

One standout example of DPA in action is Canopy MLS (Canopy), the 17^th largest MLS in the country. In 2023, they launched Down Payment Connect, a personalized landing page where homebuyers can search for DPA programs in their market. When a buyer submits a search, their results and contact information are sent directly to the affiliated agent, giving that agent a clear opportunity to start a conversation around affordability. It’s more than a lead-gen tool; it helps agents bring DPA into the discussion early, making homeownership feel more accessible from the very first touchpoint.

They’re not alone. The Down Payment Insiders Facebook group is another example, with 14,000 housing industry professionals trading ideas, marketing tactics, and DPA success stories. The momentum is building, and lenders should be paying close attention.

DPA is a driver of economic mobility — just look at the data

Lenders, this is your signal to pay attention. The real estate professionals leading the charge with down payment assistance aren’t just agents anymore—they’re financial strategists, trusted advisors, and community advocates. They’re not simply closing deals; they’re opening doors to generational wealth.

Still think that’s an overstatement? Just look at Charlotte. In 2014, the city ranked dead last—50th in the nation—for upward mobility, according to Harvard’s Opportunity Insights. Today, it climbed to No. 38. That kind of movement doesn’t happen accidentally. Canopy believes that offering its agents access to DPA program resources and promoting down payment assistance to consumers contributes to that transformation, clearing a path to homeownership where traditional lending models once built walls.

Smart lending starts with smarter partnerships

Down payment assistance isn’t a handout — it’s a high-impact business strategy. Lenders who lean into DPA aren’t just helping buyers; they’re expanding their market reach, reducing default risk, and building healthier, more resilient portfolios. Every homebuyer empowered by assistance is a potential long-term, loyal customer.

But unlocking this opportunity requires a shift in mindset. Forward-thinking lenders must go beyond traditional models and design flexible loan products that integrate seamlessly with assistance programs. They need to collaborate with real estate agents who understand affordability tools and share a commitment to long-term impact.

To those still watching from the sidelines: it’s time to adapt or be left behind. The pace of change isn’t slowing down. If you’re not investing in education, building partnerships, and actively removing barriers to homeownership, you’re not just missing out—you’re becoming irrelevant. This isn’t about protecting the status quo. It’s about rebuilding a system that actually works.

Rob Chrane is the founder and CEO of Down Payment Resource

Cenlar FSB, the second-largest U.S. subservicer, will close its facility in O’Fallon, Missouri, resulting in the termination of 93 employees, according to documents sent to state officials.

The layoffs will affect a range of roles, including 13 loss mitigation advocates, 11 MSP collections professionals and ten customer assistance specialists. Staff across all levels — including trainers, coordinators, managers and directors — are impacted.

“There will be a total closure of Cenlar’s facility” on October 31, wrote Kimberly Matthews, senior vice president of Human Resources, in a notice to the Missouri Department of Higher Education & Workforce Development.

Employees were notified of the layoffs on May 20, with separations expected to begin on July 22. Affected workers do not have bumping rights and are not represented by a union.

In a statement to HousingWire, a spokesperson for Cenlar said the company “has made the difficult decision to close” the office.

“While these situations are never easy, the closure of this location ensures we can fully focus our efforts on our other offices and position the company for continued long-term success. Cenlar remains committed to growing our subservicing business and driving positive outcomes for our clients and their homeowners.”

Cenlar managed a $728 billion subservicing portfolio as of March 31, down 1.8% from the previous quarter and 9% year over year. Its main competitor,  Mr. Cooper Group — which recently agreed to be acquired by Rocket Companies for $9.4 billion — had a $780 billion subservicing book during the same period, down 5% quarter over quarter but up 54% annually.

The subservicing sector, which includes managing mortgage payments, borrower communications, and escrow accounts for lenders, has seen major consolidation. As a result, firms and their clients are repositioning.

Tom Donatacci, chief client officer at Cenlar, said in a recent interview that M&A transactions, as an example the Mr. Cooper and Rocket, “is driving some of the movement in the industry and creating opportunity for other subservicers.”

The Federal Reserve has come under renewed fire from the Trump administration in recent weeks as the president and key housing officials battle with Chair Jerome Powell over the direction of interest rates.

On Tuesday, while speaking to members of the House Financial Services Committee, Powell was resolute that the central bank will continue its “wait-and-see” stance as it gauges the impact of Trump’s tariffs on the U.S. economy.

Mortgage rates remain stalled near 7% this week as uncertainty continues to swirl around the direction of jobs, inflation and gross domestic product. According to HousingWire’s Mortgage Rates Center, rates for 30-year conforming loans averaged 6.99% on Tuesday, down 1 basis point from a week ago. Rates for 30-year jumbo loans and Federal Housing Administration (FHA) mortgages were virtually unchanged too.

Persistent inflation?

Powell and the Fed have brought inflation down significantly in the past three years after it peaked at 9.1%. Last month’s Consumer Price Index (CPI) data showed annualized inflation of 2.4%, not far from the Fed’s self-prescribed goal of 2%.

But central bankers have been attempting to read the tea leaves after Trump’s global tariff policies were announced in April. While many of the tariffs have been on pause while the U.S. negotiates with trade partners, the Fed has said it is concerned about their potential long-term impacts. It wants more substantial evidence of a shifting economy before lowering (or raising) rates.

“The effects on inflation could be short lived — reflecting a one-time shift in the price level,” Powell said in prepared remarks before House lawmakers. “It is also possible that the inflationary effects could instead be more persistent.

“Avoiding that outcome will depend on the size of the tariff effects, on how long it takes for them to pass through fully into prices, and, ultimately, on keeping longer-term inflation expectations well anchored.”

Powell’s comments came just a day after Fed Vice Chair Michelle Bowman provided fuel to the fire by suggesting that policymakers could cut rates sooner rather than later.

“Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market,” Bowman said Monday during a conference in the Czech Republic.

Last week, the Federal Reserve continued its pause on benchmark rates for a fourth straight meeting, leaving them at a range of 4.25% to 4.5% that’s regarded by many market observers as too restrictive.

President Trump has been highly critical of Powell, whom he appointed as Fed Chair in 2017 during his first term in the White House.

In a recent post on Truth Social, Trump called Powell a “numbskull” and pointed to data from other central banks showing that the U.S. has much higher benchmark rates than many countries — including Switzerland, Japan and Canada. The president has suggested that rates should be 250 basis points lower than their current level.

Bill Pulte, the director of the Federal Housing Finance Agency (FHFA), has also weighed in by calling for Powell’s resignation. In a social media post on X on Tuesday, Pulte accused Powell of politicizing the Fed and termed his policies “dangerous” for everyday Americans who are “just trying to pay their car loans, credit cards, & mortgages.”

Where’s the housing market headed?

In the short term, interest rates could also be impacted by the U.S.’s increasing involvement in the Middle East after it bombed several Iranian nuclear sites over the weekend.

HousingWire Lead Analyst Logan Mohtashami wrote Sunday that he doesn’t “expect much to happen on rates either way” as a result of the military actions. And his analysis of Freddie Mac data found that rates have largely remained in the range of 6% to 7% since the start of 2023. He does not expect a deviation from his 2025 forecast range of 5.75% to 7.25%.

“We need to closely monitor all new variables in the economy and markets, but unless there is a significant escalation in the Middle East, the focus on mortgage rates should center on the labor market and how the Federal Reserve interprets the labor data,” Mohtashami wrote.

Altos Research data released this week shows that the housing market remains on relatively stable footing despite higher rates. The supply of available inventory is up 31% year over year, and the roughly 76,000 new listings last week is close to “normal,” according to Mohtashami.

Sellers are not panicking as they did during the housing bubble of the late 2000s, when 250,000 to 400,000 homes were being listed each week. And buyers continue to emerge as purchase mortgage application demand continues its hot streak with a 20th straight week of annualized growth.

Home-price appreciation is also stable. The S&P CoreLogic Case Shiller Index for April, released Tuesday, shows national home-price gains of 2.7% year over year. Cotality chief economist Selma Hepp noted that prices were up 1.6% since the start of the year, a slower pace than the 2.7% growth seen during the first four months of 2024.

“Softness remains concentrated in the markets in Florida, Texas and Desert West, however even in the other markets that experienced a typical spring bump in prices, those gains lagged the typical jumps seen in the years prior to the pandemic,” Hepp said in a statement.

“On the other side, there are affordable markets, particularly in Indiana, New Jersey, Wisconsin, where spring gains have exceeded pre-pandemic trends and home buying demand has been solid, but are also the markets with less inventory improvements this spring.”

Most people can’t afford to buy a New York City condo or co-op as an investment property, but for those who can swing it—and can handle the responsibilities of being a landlord, such as vetting potential tenants and dealing with midnight plumbing emergencies—it can be a good way to make some extra cash each month, create a hedge against inflation, and hopefully turn a profit when you sell.

The NYC rental market is typically competitive—there are always way more renters than buyers here. And many potential buyers find themselves renting now. They are holding off making a move amid still-high mortgage rates and are willing to pay more for rentals. 

That’s one reason brokers say it is a great time to be a real estate investor. 

But beware: The 2019 changes to New York State’s rent laws transformed renting for both renters and landlords, meaning you’ll need to weigh the cost of ownership with more caution. In addition, the recently passed Good Cause eviction legislation now protects some market-rate renters from big rent hikes.  

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Common FAQs about buying a rental property

In this edition of Brick Underground’s Buy Curious, Mary Barbrack, a broker at Compass, and Erin Wheelock, an agent at Keller Williams NYC, explained how to buy an apartment to rent out, including where you should look, what apartment size to consider, and how much you can expect to take in each month.

The proposition:

I want to buy a single apartment as an investment property. Where should I look? What type of unit is best? And what kind of return on my investment can I get?

The reality:

“It is still an amazing time for buyers, especially cash buyers who are looking to build their portfolios. We know the market is cyclical, and I believe this is an ideal time to take advantage. I look at my buyers who say they are kicking themselves for not buying in 2009. Well, now is their time, or they will kick themselves again in the future,” Wheelock said. 

Mortgage rates have dipped slightly; however, the combination of high prices and high financing costs is keeping some buyers out of the sales market—and driving rents up due to the high demand. 

Wheelock said that in a few years, you should be able to refinance at a lower interest rate. 

However, she emphasized cap rates (i.e., the rate of return on an investment property based on projected income) typically won’t cover your mortgage in NYC and can be a reason buy with all cash. That can be a shock for people new to buying here, since capitalization rates are normally around 2 percent, and your mortgage will be (much) higher.

She advised holding the property for four, five, or six years until the value surpasses what you paid for it. “I once heard someone say, ‘If you can’t afford to hold, you can’t afford to invest in NYC,’ and I strongly agree. If you are the person who has been waiting for interest rates to go up to snag some cash deals, this is your moment,” she said.

Of course, there’s the risk that you will not make anything at all. Barbrack credited the tenant-friendly legal and regulatory environment with cooling interest in being a landlord.

She said several investor clients approached her team about selling, rather than becoming landlords, citing the inability to collect more than one month’s security deposit (a disrespectful tenant can cause significantly more damage), as well as the hassle of being a landlord, in addition to the current legislative environment.

The best NYC neighborhoods for investment properties

“When I advise clients on where to plant their investment dollars in NYC’s rental market, it always comes back to one question: ‘Who are you targeting?'” Barbrack said. “Your tenant profile dictates not only the neighborhood but also the building type, price point, and even the unit layout.

Here’s how she breaks it down:

If you’re chasing the energetic millennial and Gen Z crowd—folks who prioritize walkability, nightlife, and next-door coffee shops over square footage—look no further than the Lower East Side, and West Village, and Brooklyn Heights. “These neighborhoods thrive on ‘lifestyle rent’—tenants will willingly sacrifice a spare room if it means living in the heart of the action.”

For investors seeking stable, high-end tenants—often C-suite transferees with children eyeing top schools—the classics never fail: Prime Upper East Side (60s to the 80s between Fifth and Park as well as Tribeca, where loft conversions with soaring ceilings and large kitchens/living areas mirror suburban comfort within city limits, making it attractive to families used to larger footprints. “These areas command consistently strong rents and enjoy minimal vacancy—even in softer markets—because they cater to tenants for whom school district and prestige matter as much as space.”

When you want ultra-modern finishes and luxe amenities, your target shifts to West Chelsea and Hudson Yards, the Financial District, Downtown Brooklyn, and Upper West Side new developments. “These projects attract tenants looking for turnkey, urban luxury,” she said.

If your strategy is “buy low, earn high as the neighborhood improves,” consider Murray Hill, Kips Bay, and Midtown East. Crown Heights and Prospect Lefferts Gardens are lively Brooklyn neighborhoods where new restaurants and nightlife are driving rapid rent growth. “Early investors here may face slightly higher vacancy at first, but once word spreads, your rents can leapfrog ahead.”

Bottom Line: “There is no one ‘best’ neighborhood, only the one that aligns with your tenant profile,” Barbrack said.

If you want to hone in on other emerging areas, look for the following:

• An increased investment in infrastructure, such as expanded transit options, a new school, or renovated parks; the arrival of Citi Bike stations is another clue. 

• New construction or numerous conversions—developers spend tons of money getting intel on where to invest, and you can capitalize on their findings.

• A declining average days on market, indicating that most apartments are getting scooped up after just a few days on the market.

What’s better: condos vs. co-ops?

The condo vs. co-op debate is one of NYC’s more nuanced real estate considerations. 

Co-ops make up about 60 percent of available apartments for sale in NYC and are typically more affordable than condos. However, as Barbrack pointed out, co-op buildings are tricky for investors because they typically impose strict sublet restrictions.

She explained that in most buildings, you must live in your unit for the first two years before you’re allowed to rent it out—and even then, you can often only sublet for two out of every five years, meaning you must occupy the apartment the rest of the time. What’s more, co-op boards have the power to change these rules at their discretion, even retroactively, leaving investors vulnerable to sudden policy shifts. On top of that, many co-ops levy a substantial sublet fee—often as high as 50 percent of your monthly maintenance charge—whenever you rent your unit.

“These fees can drastically erode your rental income and make it challenging to achieve a healthy return on investment,” she said.

Furthermore, purchasing in a co-op typically involves a lengthy approval process, which requires financial disclosures, character references, and a personal interview with the board. So even if they did allow you to rent the place out immediately after purchase, you might not want to deal with all of that—especially when you don’t even plan on living there.

“By contrast, condominiums are a win for investors, generally offering far greater flexibility for landlords,” Barbrack said, adding that in most condo buildings, you have the right to sublet from day one, without any minimum living requirement or waiting period. The bylaws governing condos are also much more stable, so you face far less risk of abrupt rule changes. And while condos may charge modest move-in or move-out fees, they almost never impose ongoing sublet surcharges.

“This combination of predictable rental rights and lower fees makes condos the clear choice for investors focused on consistent cash flow and long-term stability,” she said.

Usually, a listing will say whether an apartment is “investor-friendly” or allows subletting. If not, ask the listing agent.

Best unit size for an investment apartment

According to Barbrack, apartments with one or two bedrooms are typically the easiest to rent out, as prospective tenants looking for smaller units make up a larger segment of the renter population.

Larger apartments will, of course, command a higher rent, but their vacancy periods can be longer as there are fewer tenants shopping for them. That said, families are more likely to want to settle somewhere for a while, meaning they are more likely to stay for multiple years.

Some buyers prefer to purchase a few studios to rent out, rather than a single, large apartment, as a way of spreading their risk.

That’s Wheelock’s advice. “Luxury units are less in demand, so I now highly recommend getting a few smaller units because units that rent between $3,000 and $5,000 a month are where the most activity is,” she said. For example, she listed one Manhattan apartment at $12,000, and it was bid up to $13,300; the following year, that same apartment was listed at $11,500 and ultimately rented for $10,500. “I have another unit in Brooklyn that’s going through the same price issues.”

Should you buy properties that aren’t subject to the mansion tax?

Not necessarily, both brokers said. While the mansion tax on $1 million is $10,000, it represents only one percent of the overall purchase and should not necessarily be given more weight than other financial considerations.

And if an apartment with a mansion tax has significantly lower monthly payments, then it may be a smarter investment because it can be better to spend more money on a unit with low monthlies than the opposite, all else being equal. 

There are also ways to lower your closing costs—such as buying in a new development with a tax abatement. You might even be able to convince the seller of a $1 million-plus property to drop it below the mansion tax threshold. 

For more information on the upfront costs of buying a home in NYC, see “Closing costs: A guide for NYC buyers and sellers.”

Can you live off the rental income?

Probably not if you’re buying just a single apartment, our experts said. For most investors, it’s more of a second-income opportunity. You would need a much larger portfolio of apartments to rent out or get into buying and flipping if you’re looking to quit your day job.

“If you have the capital and don’t mind managing (or hiring someone to manage) a whole building, owning townhouses and small multi-families can really pay off,” Barbrack said. “Just keep in mind they’re pricier to buy and need more hands-on upkeep.” Although these opportunities are scarce in Manhattan, she noted that the inventory is deep in Brooklyn and Queens.

What to know about being a landlord 

Speaking of rent laws, you’ll want to brush up on what you’re signing up for—even market-rate tenants receive numerous protections in NYC. 

Under the Good Cause eviction law, which went into effect in 2024, an owner must have a good reason to evict a market-rate tenant, such as if they have broken the law or violated the lease terms. It also means that an owner has to justify rent increases above a certain threshold, pegged to inflation; for this year, that amount is 8.79 percent.

Ultimately, only you can be certain that you’re ready, willing, and able to handle the headaches of being someone else’s landlord. Not everybody can cope with the responsibilities. 

You need to find and vet tenants, collect rent, address any issues your tenants have with the unit, and stay up-to-date on current rules and regulations applicable to the landlord-tenant relationship to ensure you’re always on the right side of the law.

Before you venture into landlord territory, take time to identify what you’d do—and who you would turn to—in a slew of possible situations. What if the building’s boiler breaks and there’s no heat? What if the tenant discovers black mold? You’ll need to take swift action to rectify anything and everything that might (make that does) come up.

Or follow our experts’ advice and spend money on a property manager—which, while eating into your quantitative return, provides significant value from a qualitative standpoint.

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—Earlier versions of this article contained reporting and writing by Leah Hochbaum Rosner. It was updated for 2025 by Evelyn Battaglia.